Smarter remarketing strategies needed for 2016
Smarter re-marketing strategies will be needed by manufacturers and major vendors such as leasing companies if they are to be successful in the used car market during 2016.
Glass’s says that volumes of vehicles reaching the market will continue to grow as PCP returns and the effects of a strong new car market feed through to the used sector.
Rupert Pontin, head of valuations at Glass’s said, ‘More cars are entering the market all the time and this will inevitably impact on values as we head into 2016.’
‘Rightly, in our view, the market as a whole is generally aiming to counter this trend by aiming for the fastest possible, most effective disposal turnaround and sale. In a more difficult market, ensuring the use of cash is being maximized in this way is essential.’
‘Therefore going into 2016, we see more use of technology to make fast sales happen. Online trade sales of all kinds are becoming more and more effective and efficient, especially through use of the NAMA grading system and improved online images and video.’
The manufacturers that were likely to see the firmest values would be the ones that had invested the most time and effort in creating strong re-marketing programmes that looked carefully at the needs of franchise networks and vendors such as leasing companies, Rupert pointed out.
‘There are some good repatriation programmes now in place, many of which are also aiming to make the best use of technology. While they do tend to incur additional days to sale, this is generally outweighed by the benefit of the prices achieved in selling to a franchised dealer who truly knows the value of that vehicle to their dealership and the retail customer.’
However, Rupert added that many of the PCP vehicles coming onto the market were in better, lower mileage condition than ex-company cars, and this could especially create new issues for manufacturers and franchise dealers.
‘Generally, in recent years, franchise dealer networks have been able to soak up all of the quality stock available for sale through approved used programmes but, with more PCPs around, this may no longer be the case and high grade vehicles may increasingly be retailed through other channels.’
‘It is therefore becoming more difficult but also more important to make decisions about how much to invest in refurbishment before a car is brought to sale. It could be that some models are unsaleable unless they are in excellent condition because that has become the de facto standard.’